Analysis: Lease sale sparks political row

THE DALLES, Ore., Jan. 25 (UPI) -- A recent federal decision to allow oil and gas activities off Alaska's northwest coast has received accolades from oil enthusiasts and cries of foul play from congressional democrats and environmentalists.

On Jan. 2, the Mineral Management Service, a branch of the Interior Department, announced it will hold a lease sale for oil exploration in the Chukchi Sea on Feb. 6. The area included in the sale covers almost 30 million acres, comparable in size to Pennsylvania, and represents the government's third sale in the region, the last occurring in 1991. All previous leases sold in the region have expired.

Just five days after the announcement, the U.S. Fish and Wildlife Service, also in the Interior Department, publicly stated it would delay its decision on whether to list the polar bear as a threatened species under the Endangered Species Act.

The timing of these two decisions constitutes "regulatory lunacy," said Rep. Edward Markey, D-Mass., chairman of the Select Committee on Energy Independence and Global Warming, which held a hearing last week on the possible effects of oil drilling in the Chukchi Sea on the large polar bear population that inhabits the area.

"Placing the lease sale ahead of the polar bear decision gives the strong appearance of politics trumping science," Markey said in a statement announcing a bill he is sponsoring that would force the Interior Department to halt the sale until the species' status has been determined.

If FWS determines the bear is "threatened," it would be the first animal to be placed on the list because of climate change-related reasons. In September, the U.S. Geological Survey released a report projecting two-thirds of the world's polar bears will disappear by 2050 as a result of melting ice caused by rising global temperatures.

However, increasing oil drilling on the Outer Continental Shelf can be done without harming the local polar bear populations, even if climate change poses a threat to the species, MMS Director Randall Luthi told the Select Committee on Global Warming last week.

"Over the past 30 years, with existing regulatory programs in place, oil and gas activity has operated safely and compatibly with the marine life in the Alaska OCS, including polar bears," Luthi said.

MMS investigated the effect of oil drilling in the Chukchi Sea on wildlife in the area, including polar bears, before approving the sale and incorporated mitigation measures into the final decision, said Gary Strasburg, MMS spokesman.

Exactly when FWS determines the status of the species has no bearing on the lease sale anyway, Strasburg told United Press International.

"We feel we would have to take a threatened species into account, but that would not necessarily prevent us from proceeding with the sale," he said. "Regardless of whether it happens before or after (the sale), we would still add any additional stipulations required to the guidelines" for companies buying leases.

But polar bears represent only one of the species the oil drilling may threaten, said Pamela Miller, Arctic coordinator for the Northern Alaska Environmental Center, an Alaskan grassroots organization.

"Animals there are already dealing with problems of melting ice," Miller told UPI. "Adding on top of that impacts from noise disturbance and the risk of oil spills is just unacceptable."

MMS officials argue the 25- to 50-mile buffer zone of areas immediately offshore excluded from the lease sale, along with other safeguards, will protect animal life. But Miller said the measures cannot provide adequate safeguards because there hasn't been adequate research on marine life, birds and the movements of broken ice in the Chukchi Sea.

However, in all of the fuss over the polar bear, some proponents of the sale say the possible benefits to be gained by allowing drilling in the region have been overlooked. Among them is Richard Ranger, senior policy adviser for the American Petroleum Institute, the primary oil and gas trade association in the United States.

"A key driver on energy prices is that there's a lot of demand and there isn't the same growth in supply to meet it," Ranger told UPI. "We're not saying the mere production of oil and gas in the U.S. will make us energy independent, but it will help ease the pressure on prices."

Proponents of allowing the drilling also cite the national security gains that could result from increased domestic oil production. This could decrease the nation's need to import foreign oil, which reached almost 10 million barrels a day at the end of 2007, according to the Energy Information Administration, the U.S. Department of Energy's data arm.

MMS estimates the area included in the lease sale contains up to 15 billion gallons of oil and 76 tcf of natural gas. The sale scheduled for Feb. 6 comprises only one of four areas included in MMS's five-year Oil and Gas Leasing Program, launched in 2007, but none of the other sections has gone up for sale yet. All together, the sites slated for exploration may contain as much as 25 billion barrels of oil and 114 tcf of natural gas.

"That's enough oil to fuel 25 million cars for 30 years, and enough natural gas to heat 46 million homes for 30 years," Ranger said.

But others argue the estimates are misleading, both because such statistics are often inaccurate and because the oil that can actually be extracted is much less than the total amount, said Kent Moors, director of the Energy Policy Research Group at Duquesne University in Pittsburgh.

In light of the EIA's 2004 estimate that all of the Arctic National Wildlife Refuge's estimated oil reserves would only decrease U.S. oil imports by 4 percent, Moors said he sees little rationale behind drilling in the Chukchi Sea.

"It makes little sense to threaten the environment for a few additional years of extraction volume which will not appreciably change the equation anyway," he said.

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